[LINK] Holographic TV and the NBN
david.boxall at hunterlink.net.au
Fri Apr 27 11:18:50 EST 2012
On 26/04/2012 9:58 AM, Richard Chirgwin wrote:
> ... I don't fear that the NBN doesn't sufficiently future-proof the
> network, at least in my lifetime.
Not if Tony, Abbott of Bakelite, has his way.
Meanwhile, comment and a little history from
> Graeme Samuel: ... The NBN, I think, to my dismay, has been subjected to a politicisation which is really unfortunate and it’s a pity we can’t lift it out of the political debate in to a very serious financial, commercial, economic and analytical debate.
> Let me put it into the simplest of form as I see it, and just see where it takes us. Australia for infrastructure purposes can be divided up into two zones, Zone A and Zone B.
> Zone A is that area that is densely populated. We’ve got a massive continent here, and in terms of land area per capita, I think that we probably have the greatest land area per capita of any continent in the world.
> So we have Zone A, which is the more densely populated area, and Zone B, which is the less densely populated area, the more sparse areas. We call it rural and regional Australia.
> Since Federation, and in fact before that, we took a social view that we were going to provide rural and regional Australia, Zone B, with services like roads, water and electricity and postage. All these services – television services, telecommunications – were all going to provided on the basis that this was the way that Australia’s demographic structure was created and it ought to preserved.
> On any analysis, servicing Zone B is far less profitable than servicing Zone A, the densely populated areas. In fact, Zone B is unprofitable. But we’ve still got to do it. That’s the nature of the social contract that we have in Australia between the government and its population.
> In a sense, that is the basis of the National Broadband Network. The NBN is covering 100% of Australia, 93% through fixed line technology – fibre optics – and 7% through wireless and satellite. And on all the work that the ACCC did, there is no question that private sector would regard Zone A, encompassing about 75% of the population of Australia, as being profitable, commercial.
> Telstra always said as much in terms of what it put to government what it would do, as did Optus with the Fanoc consortium (later called TERRiA).
> It’s the remaining 25% that is the issue. And when you have Zone A – 75% – profitable, and Zone B – the remaining 25% – very unprofitable, in fact potentially loss making, when you put them both together, then guess what happens? You average out with a fairly low rate of return.
> Now, I should’ve thought that at some point of time, someone is going to actually separate out Zone A and Zone B and say to themselves if we’ve got a profitable Zone A, an unprofitable Zone B, then what we’ll do is separate them out and we’ll be able to create, or have, an entity that will earn a commercial return providing that someone – it’s got to be government – does what is done with every other utilities sector and with the roads and the dams and the water, electricity, gas, telecommunications, postage – subsidise Zone B.
> And when we get to the reality of that which may be some years down the track, when I think we’ll actually understand how the NBN is working, but to talk of the NBN earning 7% on its funding and all that sort of thing, I think just ignores the fact that 25% of the NBN is like every other utilities sector that we provide, every other infrastructure that we provide to Zone B – it’s unprofitable.
> Stephen King: So shouldn’t the government then have followed a policy where it shouldn’t be involved in the NBN and should be involved in a rural and regional broadband network, funded explicitly out of taxation revenue and then left the city areas, the urban areas of Australia, to run on competition?
> Graeme Samuel: It tried that. It tried that for several years in discussions and negotiations with Telstra under its former management of you know, Sol Trujillo, Phil Burgess and then-chairman, Don McGauchie.
> And it failed, it couldn’t reach a sensible commercial resolution. The ACCC was intensely involved in the negotiations, but couldn’t reach a sensible commercial position.
> In the end the government decided to go a different route and so, if we want to see a fibre optic fixed line network supplemented by a wireless network, both for that 7% in the sparsely populated rural and regional Australia, and also a complementary wireless network covering the rest of the country – then the government would have to sponsor it.
> That’s not unusual, we’ve seen that happen, where government will turn around and will say “we will take the front running on this, we’re running into a problem trying to get those in the private sector to do this, for a whole range of reasons, therefore we’ll do it. And ultimately when it’s done we’ll turn around and do what I said before, we will separate them out into their two components. We’ll subsidise the Zone B and that will enable the whole project to earn a commercial rate of return that, in appropriate circumstances could prepare the project for some form of private sector ownership”.
> I’ve said over and over again that if Catherine Livingstone as chairman and David Thodey as CEO had been in charge of Telstra during those days of 2004 through to 2009 when the tender was put in for a fibre-to-the-node network, I suspect we would have a completely different telecommunications regime today.
David Boxall | In a hierarchical organization,
| the higher the level,
http://david.boxall.id.au | the greater the confusion.
| --Dow's Law.
More information about the Link